UPDATED 4.37pm: The Thames Coromandel District Council is investigating a local fundraising group who are stopping traffic and asking for donations.

Drivers have been waved down with stop-go signs on an open stretch of Colville Road and asked to hand over a gold coin.

The money is reportedly going to the Koputauaki Community Centre.

Thames Area Manager Greg Hampton says they've only just become aware the group is using stop-go signs.

He says they wouldn't endorse a group using those on a main highway to collect donations and are looking into it.

The Automobile Association's communications manager Liam Baldwin says it's confusing for drivers and it's a safety issue.

"What they're doing there is removing people's options. Freedom of movement, the ability to just pass down the road. We wouldn't agree with that.

He says they needed warning signs, and trained traffic directors.

"There's a safety issue here. If you're going to be doing anything on the road in terms of impeding traffic there's a whole set of processes that they need to follow, and they shouldn't be doing it without going through those processes."

Aucklander Joel Gardner was stopped at Easter weekend, and told it was a gold coin donation to get through.

He wasn't told what the money was for.

The AA says it's concerned at the use of stop-go signs, which are supposed to be used to indicate hazards.